BASIC INFORMATION

Full Country Name: Ukraine


Area: 603,700sq km
Population: 47.8 million (est.)
Capital City: Kiev (Kyiv) population: 2.6 million (Dec 2001 census)
People: Ukrainian 77.8%, Russian 17.3%, other 5% (Dec 2001 census)
Languages: Ukrainian is the official language, but Russian is widely spoken, particularly in the East and South. There are small numbers of Romanian, Polish and Hungarian speakers, and about 250,000 Crimean Tatars.
Religion(s): Ukrainian Orthodox (Moscow Patriarchate) (10-12 million), Ukrainian Orthodox (Kiev Patriarchate) (2-3 million), Ukrainian Greek-Catholic (Uniate) (850,000), Ukrainian Autocephalous Orthodox (800,000), Jewish (70,000), Muslim.
Currency: 1 hryvnia=100 kopiykas
Major Political Groupings: Our Ukraine (led by Vyacheslav Kyrylenko), Yulia Tymoshenko Bloc (both pro-market economy, pro-reform, pro-EU), Party of the Regions (favours closer relations with Russia, most support in the East), Socialist (more left than centre-left), Communist and various other parties and blocs. The present Government is a coalition of the Party of the Regions, Communists and Socialists.
Constitutional Form: Parliamentary-Presidential Republic
Head of State: President Viktor Yushchenko
Prime Minister/Premier: Viktor Yanukovych
Foreign Minister: Arseniy Yatsenyuk

GEOGRAPHY

Location: Eastern Europe, bordering the Black Sea. Border countries: Belarus 891 km, Hungary 103 km, Moldova 939 km, Poland 428 km, Romania (south) 169 km, Romania (west) 362 km, Russia 1,576 km, Slovakia 90 km.
Geographic coordinates: 50 00 N, 31 00 E (Kiev)
Area: total: 603,700 sq km; land: 574,246 sq km; water: 29,454 sq km
Land boundaries: total: 4,558 km

Coastline: 2,782 km
Maritime claims:
continental shelf: 200-m or to the depth of exploitation
exclusive economic zone: 200 nm
territorial sea: 12 nm
Climate: temperate continental; Mediterranean only on the southern Crimean coast; precipitation disproportionately distributed, highest in West and North, lesser in East and Southeast; winters vary from cool along the Black Sea to cold farther inland; summers are warm across the greater part of the country, hot in the south.
Terrain: most of Ukraine consists of fertile plains (steppes) and plateaus, mountains being found only in the west (the Carpathians), and in the Crimean Peninsula in the extreme south
Elevation extremes: lowest point: Black Sea 0m; highest point: Hora Hoverla 2,061m
Natural resources: iron ore, coal, manganese, natural gas, oil, salt, sulphur, graphite, titanium, magnesium, kaolin, nickel, mercury, timber, arable land.
Land use: arable land: 58%; permanent crops: 2%; permanent pastures: 13%; forests and woodland: 18%; other: 9% (1993 est.).
Irrigated land: 26,050 sq km (1993 est.).
Natural hazards: n/a

HISTORY

The Ukrainian people belong to the southern branch of the Eastern Slavs. Their ancestors came from Scandinavia in the 800s. The name 'Ukraina', which originated in the twelfth century, denotes borderland: the area lacks natural frontiers and has a troubled history. Ukraine had only brief periods of independence prior to 1991 – under the Cossacks from the fifteenth century until union with Russia in 1654, and very briefly after the Bolshevik Revolution in 1917. The principality of Kievan Rus was established on the River Dnieper and its tributaries in the ninth century and Orthodox Christianity was established in the tenth. Kievan Rus became the centre of a great civilisation but fell in 1240 to the Mongols. They in turn were driven out by the Grand Duchy of Lithuania in 1362. In 1569 the Grand Duchy merged with the Kingdom of Poland to form the Polish Lithuanian Commonwealth.

Following an uprising led by the Cossack leader, Bogdan Khmelnitsky, in 1654, Eastern Ukraine accepted Russian protection. A striking equestrian statue of Khmelnitsky pointing in the direction of Moscow stands in the centre of modern day Kiev. Ukrainian autonomy in the east finally disappeared under the reign of Catherine the Great of Russia. When the Polish-Lithuanian Commonwealth collapsed in 1795, Western Ukraine became part of the Habsburg Empire.

Nineteenth century Ukrainian writers and intellectuals, inspired by the nationalistic spirit stirring elsewhere in Europe, were determined to revive Ukrainian linguistic and cultural traditions in both Western Ukraine, which was controlled by the Habsburg Empire, and Eastern Ukraine, which was controlled by the Russian Empire. Russia in particular imposed strict limits on attempts to elevate the Ukrainian language and culture, even banning its use and study.

The chaotic events following the Bolshevik revolution in 1917 and the collapse of the Habsburg Empire in 1918 prompted Ukrainian nationalists to try and create an independent Ukraine. Between 1917 and 1918, three separate Ukrainian republics declared independence. None survived. By 1921 the western part of Ukraine had been incorporated into Poland while the larger, central and eastern part became part of the Soviet Union.

The Ukrainian national idea persevered during the interwar years. Soviet reactions were severe, particularly under Stalin, who imposed terror campaigns that ravaged the intellectual class. He also created artificial famines as part of his forced collectivisation of agriculture, killing millions of previously independent peasants and others throughout the country. Estimates of deaths from the 1932-33 famine alone range from 3 million to 7 million.

In 1939, under the terms of the Nazi-Soviet Pact, Galacia (now western Ukraine) was occupied by the Soviet Union. During the Second World War Ukraine was under Nazi occupation from 1941 until 1943-4. Kiev was awarded the Soviet title of Hero City for its resistance and suffering. Ukrainians fought in the Red Army against the Germans. Others fought with the Nazi invaders, some under duress, others hoping to establish an independent Ukraine. Resistance by the rebel bands continued up to the 1950s. At the end of the Second World War, Western Ukraine was re-annexed to Ukraine. Khrushchev ceded Crimea (until then part of the Russian Republic) to Ukraine in 1954 as a gift to mark the three hundredth anniversary of Khmelnitsky's union with Russia. During periods of relative liberalisation, as under Khrushchev from 1955-1964, Ukrainian communists pursued national objectives. In the years of perestroika, under Gorbachev, Ukrainian officials again advanced national goals. On 26 April 1986 the fourth reactor at the Chernobyl nuclear plant exploded; public perception of the authorities' failure to prevent the disaster or adequately deal with its consequences did much to undermine faith in the Soviet government.

Following the attempted coup against the Soviet leader Gorbachev, the Ukrainian parliament (the Supreme Rada) declared Ukraine's independence on 24 August 1991. This was confirmed by referendum on 1 December 1991, with 90% approving the decision. Ukraine's formal independence was recognised by the international community on 30 December 1991.

POLITICS

Recent Political Developments

Following constitutional changes agreed in December 2004, which entered force on 1 January 2006, Ukraine is a parliamentary-presidential democracy. The President is Head of State and power over the security structures rests in his Office. The Prime Minister and his Cabinet of Ministers is the senior executive body. With effect from the holding of parliamentary elections in March 2006, the parliament (Supreme Rada) nominates the Prime Minister. The parliament adopts legislation, ratifies international agreements, and approves the budget. Its members are elected to five-year terms. Political groupings in Ukraine include parties across the right-left spectrum, including liberals, socialists, agrarians, nationalists, various centrist and independent forces, Communists and radical left parties. The Constitution mandates a pluralistic political system and protection of basic human rights and liberties.

Following independence and up to 2006, Ukraine's system provided for strong presidential powers. Leonid Kravchuk, former Chairman of the Ukrainian Supreme Soviet, was President from December 1991 until July 1994. Leonid Kuchma was President for two terms from 1994-2004.
Kuchma's second term was marred by scandals over the murder of the independent journalist Georgiy Gongadze and alleged sales of the Kolchuga military detection system to Saddam Hussein's Iraq. Opposition to Kuchma coalesced around the popular reformist Prime Minister Viktor Yushchenko who was forced to resign from office in April 2001. His 'Our Ukraine' coalition was successful in parliamentary elections in May 2002.

In September 2000, Georgiy Gongadze, an internet-based investigative journalist who reported on Ukraine's corrupt oligarchs and their political sponsors, disappeared. His headless body was discovered two months later. Gongadze's disappearance and death blossomed into the deepest political crisis in Ukraine since independence when, in November 2000, the leader of the Socialist Party (Oleksandr Moroz) told the Rada that he had recordings of Kuchma, his chief of staff, the head of state security, and the interior minister suggesting their complicity in the journalist's disappearance. The recordings also contained conversations apparently implicating Kuchma and others in the government in abuse of office, corruption and possible election fraud. The scandal prompted widespread public demonstrations against Kuchma and the Rada's pro-presidential majority collapsed.

Taking advantage of Kuchma's weakness, forces in the Rada opposed to reform, including the Communists and centrist oligarch-led parties, engineered a vote of no confidence against Prime Minister Yushchenko in April 2001 and forced him to resign. Kuchma nominated Anatoliy Kinakh in his place. Pro-reform centre-right parities refused to support Kinakh, but thanks to the support of oligarch-led so-called 'centrist' factions, Kuchma was able to put together enough votes to secure Kinakh's confirmation in May 2001.

In March 2002, parliamentary elections brought Ukraine closer to meeting international democratic standards. No one bloc or orientation won a clear majority. But the elections returned a sizeable reformist bloc, namely the 'Our Ukraine' faction, headed by the former Prime Minister Viktor Yushchenko.

In September 2002, relatively peaceful demonstrations against Kuchma took place in Kiev and in major Ukrainian cities. The US then announced that the FBI had authenticated a recording of President Kuchma in July 2000 authorising the covert transfer of a Kolchuga military passive detection system to Iraq. (This recording was from the same source as that concerning the murdered journalist, Gongadze.) The transfer was never proven, but in reaction, NATO downgraded a planned NATO-Ukraine summit in November 2002 to a NATO-Ukraine Commission (NUC) at Foreign Minister level. Even so, the NUC launched a NATO-Ukraine Action Plan, while the EU announced progress on its own initiative for a closer relationship (see NATO and EU below).

In November 2002, President Kuchma dismissed Kinakh and nominated Viktor Yanukovych, Governor of Donetsk oblast (region), as Prime Minister. Following his confirmation by the Rada, a new cabinet was formed.

Orange Revolution

Campaigning for the presidential elections started in earnest in August 2004. Reformist former Prime Minister and leader of the 'Our Ukraine' bloc, Victor Yushchenko, and PM Victor Yanukovych were the clear front runners in a field of 26 candidates. After some initial prevarication, Kuchma endorsed the latter's candidacy in July. Although behind in the polls for much of the race, Yanukovych benefited from a high profile as Prime Minister (e.g. he attended the Olympics rather than Kuchma) and, according to the OSCE's reports, from media reporting heavily tilted in his favour. President Putin of Russia also gave Yanukovych his public support, including in Kiev on the eve of the first round of the elections (31 October) during the anniversary of Ukraine's liberation during WWII. Yushchenko's campaign was affected by sudden severe illness which European scientists have now confirmed as due to the poison dioxin.

The OSCE/ODIHR and Council of Europe observer mission concluded that the first round of the elections did not meet European standards for free and fair democratic elections. Despite these handicaps, and an unexplained delay in the announcement of the results, Yushchenko narrowly beat PM Yanukovych by 39.87% to 39.32%. Socialistleader Moroz, who had come third with 7%, publicly backed Yushchenko for the run-off between the two leading candidates scheduled for 21 November.

Although opinion and exit polls showed Yushchenko with a clear lead (7-15%), the results tallied by the Central Election Commission on 22 November gave Yanukovych a lead of 49.4% to 46.7% over Yushchenko. The OSCE issued a statement the same day saying that the election was not free and fair and the EU's Foreign Ministers meeting in Brussels issued a statement condemning the standards of the election and agreed to summon Ukraine's Ambassadors. Large-scale opposition demonstrations began in Kiev and other cities across Ukraine to protest at the result. Despite the widespread condemnation of the elections, on 24 November the Central Election Commission declared Yanukovych the winner. But the next day the Supreme Court banned the official publication of the results while it heard the opposition's complaints.

With tension rising, the EU sent its High Representative Javier Solana to Kiev. Together with the Presidents of Poland and Lithuania, Solana met all parties in an attempt to broker a solution to the growing crisis. Opposition pressure on the government to overturn the fraudulent election result continued to grow, with large-scale demonstrations (reaching over 500,000 people in Kiev), a blockade of government offices, and a vote by parliament on 27 November to invalidate the election. Support for Yanukovych fell further when he seemed to imply that he would support secession of some of the eastern regions of Ukraine if he did not become President.

On 1 December a political agreement was reached between Yushchenko, Yanukovych and Kuchma at talks facilitated by HR Solana and the Presidents of Poland and Lithuania. This led to a decision on 3 December by the Supreme Court invalidating the second round of the elections and calling for a re-run on 26 December. Agreement was reached on 8 December to the re-run of the elections together with a package of constitutional reforms to transfer some of the powers of the President to the Prime Minister and Parliament. Yushchenko won the re-run election by an eight-point margin over Yanukovych. Yushchenko was inaugurated President on 23 January.

Tymoshenko Government, Feb-Sept 2005

The Rada appointed a new government on 4 February 2005 following the approval by a substantial majority of Yulia Tymoshenko as Prime Minister. EU integration was the dominant theme of the new government's ambitious programme. The programme also confronted a number of the main domestic challenges in Ukraine, focusing on corruption as the number one problem.

The new authorities maintained the improvements in the media freedom and respect for the constitution. It also took positive steps to take forward the investigation into the murder of Georgiy Gongadze, as well as the cases of other missing journalists.

However, due to public disagreements within the government, Yushchenko decided to sack his entire cabinet on 8 September 2005, including Prime Minister Tymoshenko.

Yekhanurov Government, Sept 2005-March 2006

Yushchenko appointed Yuri Yekhanurov as Prime Minister. Yekhanurov was a former economist and long time ally of Yushchenko's, having previously served as Deputy Prime Minister with him. After initially being rejected by the Rada, and following a pact between Yushchenko and his former presidential rival Regions Party leader Yanukovych, Yekhanurov was approved in a second vote on 22 September 2005. ekhanurov set out his priorities as passing WTO legislation, a sound 2006 budget, and drawing a line under the controversial privatisation review. At the EU-Ukraine Summit on 1 December, the EU announced that Ukraine had met the technical criteria to be granted Market Economy Status.

March 2006 Parliamentary Elections

Parliamentary elections were held on 26 March 2006. The parties which passed the 3% electoral threshold were: Party of Regions (32% - 186 seats), Bloc Yuliya Tymoshenko (22% - 129 seats), Bloc Our Ukraine (14% - 81 seats), Socialist Party of Ukraine (6% - 33 seats) and Communist Party of Ukraine (4% - 21 seats). The elections were assessed by the OSCE to have been conducted largely in line with international standards, and were probably the freest and fairest elections ever held in the CIS region. They were held under constitutional changes which have given Ukraine a hybrid parliamentary-presidential system of government.

A lengthy coalition building process followed the elections. Initial attempts by Bloc Our Ukraine, Bloc Yuliya Tymoshenko and the Socialists to form an "Orange" coalition failed and on 3 August an "anti-crisis" coalition was formed by the Party of Regions, Communists and Socialists, with Viktor Yanukovych as PM. Before nominating Yanukovych as Prime Minister, President Yushchenko secured his agreement to the 'Universal' – a Declaration of National Unity, which lays out the policy framework for the new Government. Its aims include continuing Ukraine's European integration policy with EU membership the future goal, developing a working partnership with NATO with a view to membership and maintaining the Ukrainian language as the sole official language. It was signed by President Yushchenko, Party of Regions leader Viktor Yanukovych, Speaker of the Upper House Oleksandr Moroz, former Prime Minister Yuri Yekhanurov, representative of the party 'Our Ukraine' Roman Bezsmertniy, leader of the Socialist Party, Vasiliy Tsushko, and leader of the Communist Party, Petr Simonenko. Yuliya Tymoshenko refused to sign the document./>
The co-habitation between President Yushchenko and Prime Minister Yanukovych has been uneasy. Differing interpretations of the constitution have led to disagreements over the respective roles of President, Prime Minister, Cabinet and Parliament on some areas of policy and on appointments and dismissals of Ministers.

On 2 April President Yushchenko issued a decree dissolving Parliament and ordering pre-term elections to be held on 27 May. The President's decree was in response to the Governing coalition's attempts to form a constitutional majority in Parliament through the incorporation of opposition deputies into the coalition. Both Government and Parliament refused to recognise the President's decree and instead forwarded it to the Constitutional Court to rule on its legality. On 26 April, President Yushchenko issued a further decree superseding his earlier one. The new decree again ordered the dissolution of Parliament but extended the date for fresh elections to 24 June. Parliament again forwarded the decree to the Constitutional Court. The political situation remains deadlocked with leaders of all main parties attempting to reach a compromise solution through talks.

HUMAN RIGHTS AND DEMOCRACY

Death Penalty

The death penalty in Ukraine was abolished in February 2000, when the Ukrainian parliament removed the death penalty from the criminal code. Ukraine has also ratified Protocol No. 6 to the European Convention on Human Rights in line with her commitments to the Council of Europe.

Threats to Media Freedom

Ukraine's constitution provides for freedom of speech and freedom of the press. But under President Kuchma the government interfered with the news media and restricted those rights through use of tax inspections, libel cases, subsidy of friendly media, and intimidation of journalists. Journalists also received forms of pressure to provide positive coverage of President Kuchma, via so-called 'temniki' issued by the Presidential Administration.

This media control and manipulation worsened during the election campaign with an overwhelming bias against the opposition and in favour of the official candidate, Prime Minister Yanukovych. After the first round of the election a defection by journalists weakened the bias against Yushchenko. This weakening of government control of the media continued apace after the second, fraudulent, round and as opposition to the stolen election mounted. As a result of this, the defection of various media outlets to the opposition and the ending of the issuing of 'temniki' the re-run election on Boxing Day election was held in a comparatively free media environment.

No one has been convicted for the murder in 2000 of Georgiy Gongadze. In January 2006, the Kiev Court of Appeals began hearings in the case of three defendants (including two senior police officers) accused of being accomplices in the murder.

PEACEKEEPING

Over 28,000 Ukrainian troops have contributed to international peace support operations in the fifteen years since independence. Ukraine remains a willing multilateral contributor to peace support operations and is open to providing operational access to NATO countries, as well as the use of its training areas. Prime Minister Yanukovych has confirmed that NATO operations and missions remain a priority for Ukraine. Ukraine has good capability in Nuclear Biological Chemical defence. Its airlift capability is a potential asset to multinational operations, although third party funding is necessary.

During the Iraq conflict in 2003 Ukraine deployed a nuclear, biological and chemical battalion to Kuwait. In August 2003 Ukraine deployed some 1,650 troops to Iraq as a major contribution to post-conflict stabilisation and later increased this to 1,800. The troops handed over to Iraqi battalions and withdrew by the end of December 2005, though Ukraine has continued to support Iraq's post-conflict stabilisation with 50 security sector trainers. In May 2004 Ukraine deployed 370 personnel to support the UN peacekeeping operation in Liberia. Ukraine also participates in operations in Sierra Leone and the Balkans and is now one of the largest European contributors towards peacekeeping operations. In early 2007 the Ukrainian Navy is expected to join NATO's counter-terrorist operation ACTIVE ENDEAVOUR in the Mediterranean.

ECONOMY

Basic Economic Facts

Exchange Rate: 5.05 hryvnvya (UAH) per US$1. (Feb 2006)
GDP:2006 US$ 106.08bn (government figure)
GDP per head: 2004 US$ 1,584 (government figure)
Annual Growth: 2006 7.1% (government figure)
Annual Consumer Inflation: 2006 11.6% (government figure);
Major Industries: Coal, electric power, ferrous and non-ferrous metals, machinery and transport equipment, chemicals, agriculture, food-processing (especially sugar)
Major Trading Partners: EU, CIS, China, US. In March 2003 Ukraine signed a bilateral protocol with the EU on WTO accession and the government aims to accede in 2007. Negotiations on a Free Trade Agreement with the EU will follow. Separately in September 2003 it signed an agreement on a Single Economic Space with Russia, Belarus and Kazakhstan. Discussions between the four countries have continued, but it is not yet certain how the SES will be taken forward by Ukraine's government.
Aid and Development: The World Bank's US$750m Programmatic Assistance Loan, allocated in its 2001-03 Country Assistance Strategy, depends on Ukraine agreeing a new lending agreement with the IMF; the first tranche was disbursed in 2001 and a second tranche of US$250m was agreed in December 2003. The remaining US$175m will be disbursed when the PAL II benchmarks have been met. A new CAS for the period 2003-07 was launched in May 2003. Governmental aid organisations active in Ukraine include DfID, USAID and the EU's TACIS programme..

INTERNATIONAL RELATIONS

Ukraine's Relations with Neighbours

Russia

After a period of strain in the early-mid 1990s, a major breakthrough in Russia-Ukraine relations occurred in May 1997 when Presidents Yeltsin and Kuchma signed an agreement on the Black Sea Fleet, whereby Ukraine undertook to lease the harbour of Sevastopol to Russia until 2017. The presidents also signed a Bilateral Treaty on Friendship and Co-operation, recognising each other's sovereignty and territorial integrity within their existing borders. In February 2003, the two countries agreed on the delimitation of their land border. However, this left the Azov Sea border undelimited and in October 2003 a dispute flared over Ukraine's possession of Tuzla Island in the Kerch Strait, which links the Azov and Black Seas. The two sides signed a framework agreement on the Kerch Strait in December 2003, controlling the entry of naval vessels of other states. This was ratified by the respective parliaments in April 2004, although negotiations on the precise location of the maritime borders continue.

President Putin's backing for President Yushchenko's opponent in the 2004 Presidential election and Yushchenko's government's pro-EU and NATO policies strained Ukraine's relations with Russia in 2005-6. Nevertheless, Yushchenko made Moscow his first overseas visit after his inauguration and Putin made a return visits to Ukraine in March 2005 and December 2006. Since his appointment as Prime Minister in August 2006, Yanukovych has sought to develop relations with Russia. He met Putin at a meeting of CIS leaders in Sochi in August 2006 and has subsequently visited Moscow. A priority for Yanukovych has been to reach agreement with Russia on the supply of gas to Ukraine, following the dispute in late 2005 and early 2006 which saw supplies interrupted. On 24 October 2006 Ukraine and Russia reached agreement on the supply of gas to Ukraine for the whole of 2007.

Poland

Poland was the first country to recognise Ukraine's independence and in 1992 Poland and Ukraine signed a Treaty of Friendship and Co-operation, renouncing territorial claims and confirming the inviolability of their frontiers. Poland sees itself as Ukraine's best ambassador to Euro-Atlantic institutions (e.g. Poland lobbied for Ukrainian membership in the Council of Europe), and Ukraine welcomes Polish support for its European aspirations. Ukrainian troops in Iraq served in the Polish-led part of the multinational force.

The role played by then President Kwasniewski in helping to facilitate a resolution to Ukraine's political crisis in 2004 and Polish support for Ukraine's aspiration to join the EU have further strengthened this relationship.

Georgia, Ukraine, Azerbaijan and Moldova (GUAM)

Ukraine has been a leading member of GUAM (Georgia, Ukraine, Azerbaijan and Moldova) since 1996 and has played an active part in its development. GUAM states seek to co-operate on economic and democratic development. At a summit meeting in Kiev in May 2006 GUAM leaders agreed to turn the grouping into a formal regional organisation (Organisation for Democracy and Economic Development) with a Secretariat based in Kiev. Uzbekistan, which joined the group for a few years, left in 2005.

Commonwealth of Independent States (CIS)

Ukraine is formally only an associate member of the Commonwealth of Independent States (CIS) and sees the CIS's future more as a framework for strengthening bilateral economic ties than as a forum for promoting closer political integration. Ukraine has not signed the CIS Charter and does not participate in all aspects of its regional arrangements, such as the Customs Union. Nor is Ukraine a member of the CIS Collective Security Treaty.

Ukraine's Relations with the International Community

EU

Integration with the EU is a priority for Ukraine and the reform programme it is pursuing is based around bringing Ukraine closer to the EU. The foundation of the EU-Ukraine relationship is the Partnership and Co-operation Agreement (PCA), which came into force on 1 March 1998. This provides a framework for political dialogue, trade and investment links and co-operation on a wide range of other issues. The PCA also establishes a forum for regular high-level political and working-level official meetings, including annual summits.

The EU and Ukraine concluded negotiations an Action Plan as part of the European Neighbourhood Policy on 21 February 2005. Under the Action Plan Ukraine is committed to implement a range of economic and political reforms in return for which the EU offers Ukraine closer relations. Ukraine has used the Action Plan as a tool to step-up relations and bring it closer to EU standards and norms. In light of the progress made so far (notably the conduct of the March 2006 elections) EU agreed to begin negotiations on a new enhanced Agreement to replace the PCA. This new Agreement will include a deep and comprehensive Free Trade Agreement. Negotiations on the new Agreement began on 6 February 2007, although negotiations on the Free Trade aspects of the new Agreement will have to wait until Ukraine has acceded to the WTO.

WTO

Ukraine passed its final piece of domestic WTO legislation on 13 December. This was the final piece of a package of 20 WTO-related laws. The Ukrainian government therefore fulfilled its earlier commitment to pass all remaining legislation by 20 December.The legislation is currently being scrutinised by WTO member states. We welcome the Ukrainian Government's commitment to WTO accession and together with EU partners we look forward to negotiating a deep and comprehensive Free Trade Agreement once the process of accession is finalised. This will bring real benefits to the people of Ukraine.

Commenting on this achievement by Ukraine, Rt Hon. Geoff Hoon, Minister for Europe, said:

'I congratulate the Ukrainian President, Prime Minister and Parliament on passing the final piece of legislation required for WTO accession on 13 December. This is a real achievement. While WTO Member States must now scrutinise the legislation in the Working Party in Geneva, I hope that Ukraine can now quickly complete the process of accession to the WTO and begin to play a role in the multilateral trade arena. This will also allow the EU to take forward preparations for a Free Trade Agreement.'

NATO

Ukraine announced in May 2002 that it was seeking to join NATO. The NATO-Ukraine relationship is based on The Charter on a Distinctive Partnership, signed in Madrid in 1997. This set out principles for developing NATO-Ukraine relations, possible areas for co-operation and consultation, and established mechanisms for managing the relationship, including the NATO-Ukraine Commission (NUC). Ukraine has enhanced its participation in the Partnership for Peace (PfP): Ukrainian troops are serving side-by-side with NATO in Kosovo, and Ukraine has contributed to the NATO Training Mission in Iraq, provided logistical support to NATO's contribution in Darfur and stated its intent to support Active Endeavour, NATO's counter-terrorist operation in the Mediterranean. In addition, NATO and Ukraine have established a NATO Information Office in Kiev, designated Ukraine's Yavoriv manoeuvre range as a PfP training centre (the first such outside NATO territory), established a Joint Working Group on Defence Reform, and signed a Memorandum of Understanding on Civil Emergency Planning. In response to Ukraine's wish for a closer relationship, a NATO-Ukraine Action Plan was announced at the Prague Summit in November 2002. In April 2005 NATO launched an Intensified Dialogue on Ukraine's membership aspirations.

Since Yanukovych's appointment as Prime Minister, divisions have emerged on the pace of progress towards NATO membership. President Yushchenko favours early adoption of a NATO Membership Action Plan (MAP), the next step towards membership. But Yanukovych took a more cautious line during his visit to Brussels in September 2006, pledging to deepen co-operation with NATO and improve understanding about the organisation within Ukraine, where public opinion is low (anti-NATO protests took place in Crimea in June 2006 in the run up to planned bilateral military exercises involving US and UK forces). Yanukovych added that any move regarding a MAP would depend on public opinion and that membership would require a referendum in Ukraine.